A few weeks ago, we wrote a blog post about the Securities and Exchange Commission’s Regulation SCI, aimed at more closely regulating the IT systems running the majority of the US stock exchanges and injecting investor confidence back into the market.
As mentioned in that previous post, we believe the proposed regulation does not go far enough to ensure that the integrity and structural quality of these trading platforms are properly managed -- and the instability of these systems has been all too evident over the past week or so.
As leaders in software quality, the experts at CAST were called on by a number of leading news outlets for our comments on what we can learn from these outages, and how they could have been prevented.
How to Make the Nasdaq System More Resilient – Bloomberg TV
"These are all highly data intensive systems. They pass information, monitor it ... if you have a complex system that manages master data, you also have multiple components that can act on that data -- change it remove it, or add it. If you're not managing the way that's handled, like you have 2 different components that manage the data, you can run into corruption issues." – Lev Lesokhin
Exchanges must improve software or risk more Nasdaq-style outages – ComputerWorld UK
“In the past we have seen outages blamed on networks that really shouldn’t have happened in the first place – where the infrastructure just really wasn’t designed to cope with badly designed software, and the outage could have been avoided by having better designed software in the first place." – Lev Lesokhin
"Most IT applications have dead code. It's in there just hanging out in the code base but none of the live modules are calling it. If you don't have structural oversight then you don't know if your new live code could be calling the dead code." – Lev Lesokhin
Trading halted on NASDAQ – Reuters
“The pattern of technical problems that we are seeing is definitely undermining confidence of investors in having fair access to the markets. The frequency of technical issues affecting trading is a wake-up call to business leaders in capital markets that they need to carefully scrutinize the structural integrity of their software systems." – Lev Lesokhin
Deutsche Boerse’s Eurex halts trading as data worries mount – City A.M. UK
“The more components you have dealing with data, the more likely you are to have data corruption. There are complexity thresholds and we’re starting to hit some of these. ”– Lev Lesokhin
Nasdaq resumes trading after technical glitch – The Washington Post
“This is hundreds of developers working every day, changing code, putting it together and testing it. The way that process is overseen and the construction and the quality of the construction is something that the industry really needs to catch up on.” – Lev Lesokhin
"The fundamental problem in some of these organizations is that they've got a trading floor with market traders who just want the systems to get things done as quickly as possible, and they don't care as much about whether they are pushing too fast, or if they are getting things into the system too quickly. It's very difficult for an IT organization to make sure their software is well engineered and not a big pile of spaghetti code; it's hard for them to test and hard for them to ensure it stays robust.” – Lev Lesokhin
Want to keep your organization out of the headlines? Reach out to us at email@example.com and we’ll make sure your systems are more resilient, reliable and far, far away from bad press.
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.